Correlation Between Amkor Technology and BANK RAKYAT
Can any of the company-specific risk be diversified away by investing in both Amkor Technology and BANK RAKYAT at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Amkor Technology and BANK RAKYAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and BANK RAKYAT IND, you can compare the effects of market volatilities on Amkor Technology and BANK RAKYAT and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Amkor Technology with a short position of BANK RAKYAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and BANK RAKYAT.
Diversification Opportunities for Amkor Technology and BANK RAKYAT
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amkor and BANK is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and BANK RAKYAT IND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK RAKYAT IND and Amkor Technology is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Amkor Technology are associated (or correlated) with BANK RAKYAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK RAKYAT IND has no effect on the direction of Amkor Technology i.e., Amkor Technology and BANK RAKYAT go up and down completely randomly.
Pair Corralation between Amkor Technology and BANK RAKYAT
Assuming the 90 days horizon Amkor Technology is expected to under-perform the BANK RAKYAT. But the stock apears to be less risky and, when comparing its historical volatility, Amkor Technology is 1.34 times less risky than BANK RAKYAT. The stock trades about -0.19 of its potential returns per unit of risk. The BANK RAKYAT IND is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 22.00 in BANK RAKYAT IND on October 31, 2024 and sell it today you would earn a total of 1.00 from holding BANK RAKYAT IND or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amkor Technology vs. BANK RAKYAT IND
Performance |
| Timeline |
| Amkor Technology |
| BANK RAKYAT IND |
Amkor Technology and BANK RAKYAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amkor Technology and BANK RAKYAT
The main advantage of trading using opposite Amkor Technology and BANK RAKYAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, BANK RAKYAT can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BANK RAKYAT will offset losses from the drop in BANK RAKYAT's long position.| Amkor Technology vs. JAPAN TOBACCO UNSPADR12 | Amkor Technology vs. Sims Metal Management | Amkor Technology vs. PKSHA TECHNOLOGY INC | Amkor Technology vs. AAC TECHNOLOGHLDGADR |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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